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Dáil Éireann díospóireacht -
Tuesday, 24 Oct 1989

Vol. 392 No. 1

Written Answers. - Income Assessment.

170.

asked the Minister for Social Welfare if his attention has been drawn to the system operating in his Department in assessing applicants for old age non-contributory pensions, whereby interest on money invested is assessed at 10 per cent when in fact with the deduction of the DIRT tax it would not realise half of that amount; and if he will consider disregarding a sum not exceeding £5,000 which would act as an encouragement to old people to invest their money rather than keep it at home.

Applicants for old age pension who have capital are assessed with a notional income from that capital. Under the formula for assessing income from capital which is set out in the legislation the first £200 of capital is disregarded, the next £375 is assessed at 5 per cent and the balance is assessed at 10 per cent.

The pension paid to an applicant depends on the total amount of his means. However the first £6 of a person's weekly means are disregarded. This means that an old age pension couple with no other means can have capital of up to £5,975 and still qualify for the maximum rate of old age pension. A couple can have joint capital of £55,895 and still qualify for the minimum pension. The equivalent amounts for a single old age pensioner are £2,987.50 and £27,947.50. My Department have a special leaflet available which advises pensioners as to the amount of pensions which they can have and still qualify for pension.

The provision of a £5,000 disregard of capital for pensioners in addition to the existing disregards would have major financial implications. Any such changes would have to be considered in a budgetary context.

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